he has the upper happened on taxes. the upper hand on taxes. >> why the compromising words? the white house moderated demands. the president says tax rates for the wealthy have to rise, but now word that the actual rate could be negotiatable! >> will i accept the tax increase as a part of a deal to actually solve our problems? yes. >> the problems according to republicans entitlement. and a leading democrat embraced a way to cut medicare costs. it is called means testing meaning those who make more would have to pay more for medicare. >> those with higher income and retirement could pay more. >> it is a two-man negotiation with the speaker feeling the heat from his right. "saturday night live" suggested republicans are bullying baner even in the cafeteria. >> he didn't even have any milk to drink. >> he has thrown it in the garbage. >> did they make any progress? both sides are tight lipped. the speaker's house and the white house released the exact same statement word for word. they are both being very quiet. david curly, abc news, the white house. >> the federal government